The gross profit margin and cost of goods sold percentage are complements of each other and always add to 100%.

Question

Quizplus · Accepted Answer

This statement is true. The gross profit margin is calculated by subtracting the cost of goods sold from total revenue and expressing it as a percentage of total revenue. Therefore, the higher the gross profit margin, the lower the cost of goods sold percentage, and vice versa. Together they always add up to 100%.

The Gross Profit Margin and Cost of Goods Sold Percentage